Reporting Time Pay Owed for Call-In Shift Workers, California Court Rules

By SHLC on December 27, 2017 in Legal Update

The days of uncompensated call-in shifts may be over. A California state court recently ruled that employees who are required to block off time and check-in for call-in shifts that day must be paid reporting time pay, even if the employees don’t have to physically show up for the shift. Under California law, employees who report to work for a scheduled shift but are not furnished at least half of their scheduled or usual hours must be paid for half of their scheduled or usual shift, with a minimum of two (2) hours and a maximum of four (4) hours owed.

For decades, restaurants and retail employers in particular have required employees to call, text or e-mail into work prior to the start of a tentatively scheduled shift to find out if they actually need to show up to work. This practice allows employers to have some flexibility in determining how many workers are actually going to be needed for a particular shift before bringing in employees to fill those shifts. After all, calling in five servers to cover five sections of a restaurant would be a waste of a restaurant’s resources if there was only enough business to fill two of those sections, right? Utilizing a call-in shift scheduling system helps alleviate this problem by only bringing in enough employees to cover the amount of business on any particular day. However, the employer must make sure that enough staff is available if there is a rush of business, hence requiring all five servers to call in to find out if they need to report to work that day.

In the case of Monroy v. Yoshinoya America, the employer required employees to call in two hours before a designated “on-call shift” and if an employee failed to do so he/she would be disciplined. As a result of this policy, the employees that were “on call” arguably could not make plans for the day that they were scheduled to call in for their shift because they may have to ultimately show up for work.[1] The court ruled that because an employee is required to be available and call in for an “on-call shift,” the worker is, via telephone (or text/email), reporting to work. As a result, the employee is entitled to reporting time pay. The Court stated: “In the modern era where many workers complete their task[s] remotely using telephones to clock in or clock out for time-keeping purposes and, as [they] have in the case at hand, check for shifts telephonically, the common sense and ordinary reading of the order would include the reporting that plaintiffs engaged in.” While this ruling can be viewed as a “win” for employees, it is important to note that the ruling came at the trial court level and not from an appellate court, which means that the ruling is not treated as binding precedent on other courts. However, this ruling may indicate how a future appellate court in California might rule.

In another case, a federal court in California granted preliminary approval of and conditional class certification for a $3.5 million settlement between Pier 1 Imports and its employees. The Pier 1 employees sued for hours spent working without pay while checking-in to find out if they had to work a “flex shift.” The employees alleged that they had to “mold their lives around the possibility that they will work each and every” so-called call-in shift, even though the home goods store often chose not to put them to work. Among the claims asserted by the employees was one for reporting time pay. It is important to point out that since this case was settled, it too is not considered binding precedent on other courts but does illustrate the high risk posed by this practice.

California’s Reporting Time Requirements

The concept of “reporting time pay” was created to ensure employers do not take advantage of workers by scheduling workers to report to work and then sending them home without being put to work. California law states that each workday an employee is scheduled to report to work but is not put to work, or is provided with less than half of a usual day’s work, must be paid for half the usual scheduled day’s work, but in no event for less than two hours or more than four hours, at the employee’s regular rate of pay. In addition, if an employee reports to work a second time in any one workday and is provided with less than two hours of work on the second reporting, the employee must be paid for two hours at his/her regular rate of pay. There are exceptions to this rule (for example, reporting time pay is not owed to an employee that reports to work intoxicated, or an interruption of work is caused by an Act of God, etc.). Nonetheless, employers need to be careful about how employees are scheduled to minimize the cost associated to reporting time pay.

The practice of scheduling more employees than may be needed and then sending home some of them if they are not needed likely would fall within the scope of the reporting time pay rule. The call-in procedure at issue in Yoshinoya America and Pier 1 Imports may have been  an attempt to avoid triggering the reporting time pay rule by not requiring employees to physically report to the worksite. That practice is now legally suspect and carries significant risk to California employers.

What Does This New Ruling Mean For Employers?

As discussed above, no appellate court has yet interpreted the reporting time provision of California’s wage order covering on-call work in the situation presented in the Yoshinoya America case. However, the trial court rulings discussed in this article are a sign that the meaning of “report to work” may be expanded from an employee physically showing up to the workplace to an employee calling, texting or e-mailing the employer, even if only to find out if he/she needs to physically show up to work. At the very least, it is likely that more lawsuits alleging reporting time pay claims for this type of activity will be brought on the heels of these cases. As a result, employers in California should stay up-to-date on the law regarding scheduling practices in the jurisdictions where they have employees and have their “call-in” policies reviewed.

[1] Some may argue that this practice also supports a claim for compensable on-call time because the call-in employees are so restricted in what they can do when they might be required to report to work. Employers should be mindful that on-call time may be compensable, depending on the facts of the case.